OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable Claude ii. ~illiema 

Chairman an4 %soutire ~lreotor 

Teuo Unmploymont Gonpmmation Oola~isdon 

matin, Texae 

thir opinion, has bea 

appellate aourts (38 8 

Mtlolo bmtlb 17(r)(4 

r0ii0w8 t 

equantly rtatea 3.21 

etaon or the 

truotion or 

read8 In part a8 

ned ie the question of whether the 

'owned or oontrolla4 (by leelly 

enfomoabls meant or othemiro) dlroCaly or ia&ireotly 

by the same intere88.' 

"Query: Dsea Bubso&ien 19 (f)(r) ra4.r l a& 

employing unit li.ablo ai an employer under them tPOt#l 

Ul. A owns anQ operates an individual business. 

?ie likewise owns iOQ$ or the voting steer or a eerporatlon. 
Bon. Olaude k. Wlllar, pa60 I 

*e. A 011110 end operatee an iz~Ilvi4~1 buOlneee. 

b likewIre own6 51s si the voting ebook of a cormpation. 

"3. A and b are equal prtnare In a buainsse. 

A and B likmlee own IO* Of the total rating etook 

o? a mrporatlon, A owning 8g and n owaing SO$. 

*a. A, B and 0 are equal pru'tnere in a bo~lnore. 

A ON B raoh own8 one-third of th0 voting Btook af a 

corporalha. 

A B and C eaoh omr one-tklrd of the votiag 022k oi a c0qwnliloa. Baoh llkOds0 ornO oneth ir od i th TOCIA@ Ob o a bf f l a&her eorpratlon.~ 

ArtFolo 538lb 1'1 (f)(4), eupra, doiinee~aa raployor 

a0 tol&we: 

"(4) &y re@oyln& wilC whloh togrthr with one 

or mare other mploy$&%@ units, Se owned or oontmlle4 

(by le$eUy l nfomubl,;li, mdene or oth~ruiee) direahly 

or indtniotly by the earn intanet, or which owae or 

eontrol8 one OS more obh~~qlo~inb; uoik (by le@llr 

onfero~able moo&e or WkorwfW), urb whisk, if tnrto& 

ae a 01nglo UAIO with Owh Qabd O~lplo~ln($,u~iO, wouU 

be an auployar ux&il*r paregraph {l) of this subeeeDion;* 

In your flret hat rituatlorr, A OWIW a& eperatoe 

an indlrl4u0lbwineee and aleo hmr l&0$ of t@ rotlag nt00k 

of a oerpoxatlon. Wo aeeume that A ,OWAO 011 of th 8Dsek 

of the eorporatlon and thr8 tha p&Fame "voting atook" has LIB 

obhar meming, 

3trlotly apea'klaa;, it may bs aaid that the etaokhoZPen 

are not the 6wnore of tha oorpore?+e pxopeS%~. $&3y do part&- 

oipak to the dletribution ot the WIPplue prorate iUw3 anmet*. 

Pmeml#J ouoa dl~.tPlbut~on, their rigate are eaid to be mraly 

,;yitial. 10 Lax. ;rw-, pp.,9803818 and auth0riblee tbmelo 

. 

IC is eloo aaid that a partnet doe0 not own any patiloular interest in 0 perlmership Ontsrprtes but bfe intelvet 

mtande only to a praposti,on8*o *hard of what rar remain after 
&an. Blatabe A. William, pegs 8 

pay&At o? the debts of the putnorehlp em4 8ho SJdtlWOAt of 

its aooouate. Sherk v. Bank, SO6 6. Vi. WT. 

The ~oau of Tua8 ~AOEBp~o~~At hnpmeatlon (bmi.eeioA, 

et al la. &as, 151 J. ki. (ad) SW (Sup, Ct. of Texas) involved 

three pwtnerehipe. A, B end 0 eomporsb cno partnerehip, A,B 

C and D oomposed en&her and 

partnuehip. 

A, 8, C an6 E eompoeeQ the third 

IA holbllrq that thou thou p8rtneTehipe were 

not owned by the l eme Interdot within tti aeening o? Artlole 

UEBlb 19 (f)(4), mupIa, kantice Grits ea54; 

*It la erldont ~that theao thrsa oen*drne are n& 

owned by the same *lntereBt.* This 18 baoauee there 

lo a partnar in No. 0 who has no lntueet iziNc. 1 or 

No. $1 anil theso lo a paHn4r In Ho. S who he8 no 

Interest in 3Jo. 1. or No. 2. I8 follows that,;? thus 

6oaoeMe oonrtltut~ OBI *Ilrqplartr,@ tt met be be6auee thy (m un&er the ~oo~tL”ol~ of the *earn 

intorut 

0 tatute . 4 

* wlthlo flu meenlqj ef the above quet& 

This lamgaage lndlretu to us that partners eaa own a 

buBlAtO0 within the menlAg of &t5010 liEB1b 17(r)(r) gugra. 

This being true, itwt3uid ?ellov ttlet tha OWAUO o? rir tm 

#took of LI rorpooatlon own the OerxWatlon withli the aeening of th8 same statute. 

In anowor to pur uueetton based upon the fimi fast 

altuetion, we ere;o? the opltien that the iadlvldaal buMno 

end the oorporatlon are ewe& by ths eamo interest rith5n the 

aemnf~y of Artiole E&&lb 19(i)(4), supra. St ?oll@we that 

eaah emplop5ng unit lr aA amp~oyef aa drflne6 by the Unemplofmerit Aot. 

In your awmd fast eittr*tlon, A owns and ojwrat~e en 

individual bualnese and also own* Sl$ of the Yatirig stock a? a 

oorporatlon. 

iye wish to point out bar* thet thraughout this opinioa 

we hare assumed that the oorparetloae mentioned bat** ~eeoeil 

only one tpgo oi eteok and that tb0 phrase wvotlng etoe+kw bar 

A0 Other BKWi~. 
Hon. Olaude A. Willinns, page 5 

situation based upon Q&mll;ar staDuts8 as i.nvo2v4 bare. It3 

that eaw, one tie A. fiica iadlv~dually omrnd an& gperatad a 

telephona ryatem saploying sir IfPLlvidu(Lla. Eis liketise 

ownsd 449 of the bob outmtandlag shares of steak In a corporatlon owning and operating a telephone sgrkpl which l mgle)rrd 

sovan indiriduale, Bssides annisg 440 ahsres oi stock in ths 

oorpcraOlon, cm&e being SO,&# ot all the stoat, Mea was alac 

Proridmnt, dirsotor and general masa&rr of ths corporatloa. 

The wire and father or Bioo owned the,othef 51 sham8 or steak 

In the oorporation. 

In holding that the above emu&orated taots bid aot 

ooqwl the oonolusion that Bias aoatxolled the aorpora~lon by 

legally anfcrsaabls mans or othsmmise, the &proms Court ot 

Yiesoux+ said I 

“DO the ooaaadsd Fasts in this sare soqpel ths eonelusion or fast that respondeat serpo~atlon wad *mantrolled* by Dse A. Bioet AppQltaatr r&J on t5Q usas 

ot the atatutsr *ConWoUUed by lagally eniorseable 

mean8 or otha#uisQ, dlnstl~ w i&IireetLJ, b; the 

oama intorwts.* JIlthougb tha awideneo may have beea 

ruah that an 5aremumr of raot aouLd have basn drawn 

to tha orfeet that ‘respondent oorporatlon was OQQtrolled by Gee A. ,%ae the iairreaes was not (Lram 

fmm the evidence by the trial o6urt, and ths Qvl(leneQ, 

as eonsedod stidentiary fasts, was not woh as to w 

th. O@EdiUiOtl Oi iaot that res emdMbwa8 a0 sontm 

1‘ 

r a&. 

Then was no eridenee that he Pie* vor;a& hi0 440 

aharas or rtock in rr8pondsnt eer ratton or that hs 

aentmlled the eor~poration*s War r ot dfTeettc8. *ho 

mara faat that he was rniplo~ed as manager of the aQPp.Wation, and was its prasldeat snd was one 0r Its three 

direotors, dose aot coaps~ tha aonohrlon that he matrolLad ruponbent by legally Qziiorasebls maan of othetwise, direotlf or imlirwtly, or that he QzOSC?i8Ql ths 

power to control that was hia by reason ai his otneX8hip 

of a majortt~ or respon&erd*r rt~ek, and 8Wh fa8t Us 

not oonaeded by the respendeA6.: Proor tha6 bhr 

of tha two 'a~Qloyft& ~1~8’ Wat$ u~+LLCilPatch]l Ted 

the 'muse ~LiCeTeS68,' ?&A& hha6 b&h @otid~bO o~~~~ll~d, 

did not coqml the oonolw~n tha6 bsth sai~ls~inl, ~~%tQ 

were controlled by the ‘“ae iat8nstQ.' 

"l'ha holdsn c# a wsjox5ty ,@i the stock Of Q OQE- 

~CIX.E~IO~ ST* ,Qr oourso, QntftlQd to dieaclte its polisr 

and sonduot it8 busiar88 In thslr OWB WW QB &Q&S a8 OhW 
Hon. Claude A. ullllau, paga 6 

not in good rafth and thalr nets 'are intra firas, but a 

mere 8dsl8eSoa that the 0wni2vshlp 0r a majority or 

re8pOXldsnt's Gtook wad in &a A. Rioe ~186 not 6n adz;;ion that euoh individual 'oontrollsd* tha corporak1thouCh a oorporation may conduot buainaar 

throigh its pFe8idant and other ofrioere tha ultimate 

sour:06 of all authority lies in t&s board ot dirsctors 

Who Stand iKI ths pia Or the individual stookholderr 

in tha Qen8e of oontrol thqoxeroity over oorporata 

affaIr8. ha adtEiQ8iOn that u.8 A. hi00 11168 PrWBidOnt 

and manager of the oorporation -8 not an admi8Qion 

that he oontrulled the aorporation.' 

In ths h88 0880, 8up~-a, .hItioe hits quotes f~ra 

the Doniphab U.ephona Cospany onea, Qupxa, a8 rOuOW#t 

"'+ * * Pl'oOl' that ths OOnt%d OS th8 tvm "smplaying units* was ultisabaly rested in tha %amQ 

ihtQ1YQt8," and that both am&l be oatroiled, did 

not ooapal the oonolu~ion bha8 both enployia~ unit8 

were 00m0u3a by theYasia illtaralt8".*" 

On the basis or t&e abare aitad OQ%Q8, wo oonslude that 

the ownerstip 0r al% or tha Qtaok 0r a aorperation by an individ~al does not of itself JlQOQ8QQril~ eo@psl the Qona1usion 

that rush iaaivldual contxols aaid earporation within the maning or &tlcle 866lb 17(f)(4). P US, in l ftwt, an8wws pour 

qW#tiOfl ba8ed Upon the QeOOBd faclt Qit@atiO$&. 

In pfiur third raat Qltuahibn, A and B are l pual partnerr in a buelnese aad liksd80 owa,lOC$ of the atoak Of a 

eorpuratlon, k owning bC$ and B crrning W$. 38 are or the 

opinion that tha partnsrrbip and the aorporatlon are ownad by 

;$ 8ame intereat within the mesain& of ArticZo WDlb 17 (i) 

mpra, for the Qama rmQonQ as cwtained ih the amwer 

ta $Our question based upon the first iaot situation. 

Xn your fourth fast situation, A, B and 0 are aqua1 

partners in a buelneas, and A and B qrs east the ownsrs of OR+ 

third or the atook or a oorpcraticn. For the raa8oaQ point04 

out in the answer to pour quesaion based upon the ascend Paot 

situation, we aoncluds that th,a ownership of one-third of the 

rtoak by eaoh, A and B, d-8 hat of itself nQoss8eri1y oonpol 

the coaolurion that they cwu or aontaol the Qorporation within 

ths m8asiag or ArMale 5aelb 17 (r)(r), supra, This answers 

your question based upostha rourth raet situation. 
Ban. Qlada A. Williams, puim b 

Xn your fifth iaat sl8uafiion, A, B and C oaoh owna 

oaa-third of the stook in two dlrfrrmt oarporatlona. kt aro 

or tha opinion that both ~orpomtfonr are owned by tho aam 

iAtOF.Et within thE rceanlng 0r Article SZ2lb 17 (r)(4), 

aupsa, ror the masons aatsd in the anner to the question 

in your first ract situation. 

FIRST ASSISTANT 

ATTORNEY GEU~L 

Youra 7ery ttruly 

bTTORlQ3YOZXERAL OF T3W.S